(Bloomberg) -- President Luiz Inacio Lula da Silva’s approval is declining even as Brazil’s economy remains strong, highlighting the risks rising prices and his own spending policies pose as he enters the second half of his term.
Lula’s approval dropped more than 3.5 points to 47.1% in November from a month prior, according to LatAm Pulse, a survey conducted by AtlasIntel for Bloomberg News and published Wednesday. Roughly the same share of Brazilians — 47.3% — said they disapproved of the president, meaning his net approval fell 5 points from October.
Latin America’s largest economy once again grew beyond expectations in the third quarter amid robust domestic demand, record-low unemployment and rising wages. But Brazilians are nevertheless increasingly pessimistic: 47% think the economy is bad against 29% who say it is good, a gap that widened by 8 points. And they are now more likely to say the economy will worsen (43%) than improve (34%) over the next six months, a reversal from October.
Quickening inflation, which rose to 4.77% on an annual basis in mid-November, appears to be dampening sentiment: 47.3% of Brazilians said they’ll purchase less over the next six months, a 17 point rise, while the proportion who said they expect to buy more fell 13 points.
The findings point to the major economic challenge Lula faces ahead of a potential re-election fight in 2026. The Brazilian leader has ramped up government spending to deliver the economic prosperity he promised on the campaign trail. But that approach is now fueling consumer price increases that are threatening to overshadow the economy’s strong performance and dent the president’s popularity — much as inflation has for leaders across the world in recent elections.
Last week, Lula ordered his economic team to attach new income tax exemptions for the poor to an austerity package — an effort soften the political risk of a plan that included cuts to social programs. But that soured investors on a proposal meant to soothe market concerns about Brazil’s fiscal deficits, sparking a selloff in assets that plunged the Brazilian real to a record low against the dollar.
The chief concern among investors is that Lula’s fiscal policy will fuel inflation and force Brazil’s central bank, which is currently raising rates at time when most others are cutting, to further hike borrowing costs that already sit at 11.25%. The sharp depreciation of the real, which ranks as the world’s worst-performing major currency this year, risks further exacerbating inflation.
Donald Trump’s tariff threats pose an additional challenge for nations like Brazil, where nearly a third expect his return to the White House to negatively affect the country’s economy, the poll found.
Lula remains more popular than fellow leftists Gabriel Boric in Chile and Gustavo Petro in Colombia. His political nemesis — right-wing former President Jair Bolsonaro — is now facing the prospect of criminal charges over an alleged coup attempt following the 2022 election, and is banned from taking part in the next presidential race.
But the left underperformed in October municipal elections, and Sao Paulo Governor Tarcisio de Freitas — widely considered Bolsonaro’s likeliest successor — appears to be gaining momentum: 50% of Brazilians view him positively against 41% who don’t, a net result that put him slightly ahead of Lula as the survey’s best-rated politician.
AtlasIntel surveyed 2,521 people in Brazil between Nov. 21-27. The poll has a confidence level of 95% and a margin of error of plus or minus two percentage points.
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